(Yicai Global) Jan. 23 -- The International Monetary Fund has raised its expectations for China's economic growth this year by 0.1 percentage point to 6.6 percent, in recognition of the country's tighter regulation of shadow banking.

China's economy is also expected to grow by 6.4 percent in 2019, 0.1 percentage point above the previous forecast made in October, the IMF said in a press briefing yesterday marking the release of its latest World Economic Outlook report.

The IMF welcomed moves in China to better supervise shadow banking, saying it is good for the country's medium and long-term development.

Interbank assets and interbank liabilities among commercial banks fell in 2017 to CNY2.8 trillion and CNY830.6 billion, respectively, as of the end of last November, China Banking Regulatory Commission data shows. This represents the first contraction since 2010, and helps to alleviate a bubble in the banking sector.

China, as one of the largest economies in the world, has pulled back on fiscal stimulus policies seen in the past few years and controlled credit growth to strengthen the overextended financial system, said Maurice Obstfeld, IMF's chief economist. These measures, coupled with the current necessary re-balancing process, mean that China's future growth rate will be lower than before, he added.

The IMF also raised its expected global economic growth rate by 0.2 percentage points to 3.9 percent for this year and next, and also substantially raised forecasts for the US growth by 0.4 and 0.6 percentage points to 2.7 percent and 2.5 percent for 2018 and 2019, respectively.